Professor John Gatsi, the Dean of the School of Business at the University of Cape Coast, has strongly reacted to the Governor of the Central Bank, Dr Ernest Addison’s claim on Ghana’s unreadiness to begin Islamic Banking activities.
Dr Addison had previously stated that Ghana is not yet ready to commence Islamic Banking activities due to the absence of Shariah-compliant regulatory and legal frameworks.
However, Professor Gatsi disagrees and believes that the appropriate regulatory framework and legal regime can be put in place to enable Islamic Banking activities to commence in Ghana.
He argues that the benefits of Islamic Banking activities are too significant to ignore and should be explored fully.
Professor Gatsi accused the Central Bank of not making the commencement of Islamic Banking a priority and quipped that the formulation of shariah-compliant regulatory and legal frameworks by the Central Bank is not rocket science and should take the Central Bank not more than six months.
Adding that developing the requisite regulatory and legal frameworks is the constitutional duty of the Central Bank and further stating that the Central Bank can request the necessary assistance in the formulation of the requisite frameworks from banking and accounting professional bodies in the country.
“The statements by the Governor by implication means the bank is not ready, putting legal and governance structure frameworks together indeed is not rocket science. This is doable with necessary consultation and technical assistance from within Ghana and the Continent. Ghana can put the required legal and governance structures together in six months,” he averred.
“Asking for inclusion to diversify sources of funding from 2004 to 2024 without a road map is unfortunate. Kindly be informed that all professional bodies from banking to accounting make Islamic Banking examinable. Islamic Banking is just not a priority of the Bank of Ghana (sic),” he added.
Professor John Gatsi, Dean of the School of Business at the University of Cape Coast, during his inaugural address as a Professor of the University on the topic “Islamic Banking Options: Exploring An Inclusive Alternative or Complement”, made a compelling case for Ghana’s integration of Islamic Banking into its financial landscape.
In his address, Prof. Gatsi emphasized that Islamic Banking should not be perceived as a substitute but rather a complementary instrument to conventional banking systems.
Central to his argument was the potential of Islamic Banking to revolutionize public debt management. Drawing parallels with nations such as Saudi Arabia, UAE, and Algeria, where debt-to-GDP ratios remain notably lower, Prof. Gatsi underscored the possibility of Islamic Banking to alleviate Ghana’s debt burden while fostering fiscal sustainability.
In an era marked by economic volatility, Prof. Gatsi urged Ghana to reassess its debt management strategies, advocating for the inclusion of alternative financing mechanisms like Sukuk (Islamic Bonds) citing the nation’s over-reliance on the international capital markets (Eurobonds).
Acknowledging the international recognition of Islamic Banking by institutions such as the IMF and World Bank, Prof. Gatsi emphasized the need for Ghana to engage in Islamic finance. He highlighted the potential of Islamic Banking to combat poverty and foster inclusive economic growth, echoing global efforts toward socioeconomic advancement.
“Islamic Banking is recognized by the UN, IMF, and World Bank with the institutions engaging in Islamic Banking in some form to help reduce poverty, and so we have no say but to also do it,” he quipped.
He has also proposed the formation of a Shariah Supervisory Board to oversee financial products offered by Islamic Banks in the country should Ghana decide to practice Islamic Banking.